No Match Found
PwC Switzerland has signed off an assurance report for Signa-Terre, a company specialized in monitoring and rating buildings’ energy efficiency.
Since 2008, Signa-Terre SA has been offering solutions and services relating to the monitoring, control, energy consumption and CO2 impact of the built environment. In this context, it produces for its customers a consolidated annual report on the energy and CO2 impacts of their buildings. Customers’ property portfolio are rated with Signa-Terre’s ImmoLabel®’s energy performance.
Signa-Terre has released its ISAE 3402 type 1 assurance report together with PwC Switzerland as independent auditor. The purpose of this report is to provide reasonable assurance as to the design and implementation of Signa-Terre’s internal controls in relation to the processing and use of building consumption data for energy monitoring reports containing indicators and benchmarking advice.
The answer is that it’s very important indeed, especially since the introduction of the Energy Strategy 2050 aiming to reduce the energy consumption of the Swiss buildings park to 55 TWh by 20501. The Asset Management Association Switzerland (AMAS) has also addressed the subject of sustainability with the publication of the Appendix to Circular 04/2022: “Environmental indicators for real estate funds” applicable to all real estate funds under Swiss law and intended to create a new standard of increased transparency for investors2.
This has made the building efficiency rating one of the key criteria in Swiss real estate funds, which are under huge pressure not just to comply, but to transparently demonstrate compliance.
This is where a rating like Signa-Terre’s ImmoLabel® comes in. Basically, it feeds into the information real estate funds put on their fact sheets. Do funds take this information on trust? No, they need independent assurance to make sure all this information on building efficiency is correct.
It’s important to understand the magnitude of the real estate business and its impact on the environment. According to the Swiss Federal Office of Energy, the building stock consumes approximately 100 TWh3, i.e. 45 per cent of the total consumer energy demand in Switzerland. Buildings also account for about one-third of Switzerland’s CO2 emissions4.
It's also important to understand the challenge the real estate business currently faces in this country as a result of the new regulation. The industry basically has a regulatory mandate to improve building efficiency, with only a few years to implement it. The necessary renovation would require billions in investment.
Given this pressure, it’s crucial to monitor the efficiency of buildings and decide where to invest in renovation.
This brings us back to Signa-Terre’s rating. Put very simply, Signa-Terre’s mission is to help prevent greenwashing or its suspicion. The company is a crucial link in a chain of trust that runs all the way from the suppliers whose products and services (including energy) go into the construction, operation and upkeep of buildings to the people who live and invest in them. If this trust is to be maintained, everyone in the chain has to be sure that adequate care is taken to ensure the information gathered by Signa-Terre is reliable. For example, the collection and processing of real consumption data is favoured in Signa-Terre’s approach as opposed to statistical data.
For a company whose core expertise does not lie in internal control systems, this is a major challenge. Over the course of this engagement our team spent with Signa-Terre, an important part of his time to share market practices.
We, by contrast, brought a profound understanding of controls to the table – but couldn’t hope to match Signa-Terre’s building and energy expertise straight off. A significant challenge was to build the necessary industry know-how in house (e.g. Swiss Society of Engineers and Architects (SIA) standards). Part of the challenge involved acquiring the skills and knowledge to interpret industry regulations that are not always precise.
Another challenge related to the complexity of the information within the scope of the engagement. With the rating requiring so much data to be collected not just by Signa-Terre, but also by third parties working on its behalf, understanding the different sources of data and assuring the quality of the information was a considerable challenge for PwC Switzerland. To get some idea of the difficulty involved, consider that the quality of Signa-Terre’s data also depends on suppliers such as electricity providers outside the organisation. Only by understanding these complex interdependencies could PwC Switzerland’s people provide reasonable assurance that Signa-Terre’s controls were adequately designed and implemented to ensure the quality and reliability of the data feeding into the rating.
Trace the overarching environmental goals of an initiative such as the Paris Agreement from the top down and you’ll find an incredibly intricate web of undertakings and regulations. And you’ll also see a rich ecosystem of partners endeavouring to make things happen on the ground. A company like Signa-Terre plays a crucial role in building trust in efforts to meet the sustainability goals. But Signa-Terre can only build trust if it itself, its processes and controls are trustworthy as well.
We as PwC Switzerland are proud of the small but important role we play in this chain of trust – and especially of our ability, demonstrated in engagements such as the Signa-Terre assurance report, to turn our hand to providing trust and assurance in new, complex, and highly relevant areas of the economy.
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